Small Entity Faces Financial Penalties Due to Incorrect Disclosure of Share Capital and Financial Details in Annual Return Filing
Background of the Adjudication Proceedings
The Registrar of Companies stationed at Gwalior has exercised adjudication powers vested under Section 454 of the Companies Act, 2013, addressing violations pertaining to Section 450 of the same legislative framework. The proceedings concerned Shreekrishna Impex Ventures Limited along with its designated directors for alleged non-compliance during the financial period 2021–22.
The matter came to the attention of regulatory authorities when the entity voluntarily submitted an adjudication application following the discovery of certain irregularities in the annual filing documentation. The application was initiated under the suo-moto mechanism, demonstrating the company's proactive approach toward addressing compliance gaps.
Nature of Violations Identified
During the scrutiny of Form AOC-4 submitted by the corporate entity, several material discrepancies emerged that warranted regulatory intervention. The primary issues identified included:
Misstatement of Authorised Share Capital: The documentation reflected an authorised share capital figure of ₹1,00,000, which was incorrectly stated in the regulatory filing.
Omission of Rental Payment Details: Critical information regarding rental payments made by the company during the financial year under examination was completely absent from the submission.
Missing Transaction Value Information: The gross value of commercial transactions undertaken by the entity was not incorporated into the filed documentation, creating an incomplete financial picture.
These oversights constituted violations of statutory disclosure requirements mandated under the Companies Act, 2013, particularly affecting the transparency and accuracy of corporate financial reporting.
Procedural Framework Followed
Appointment of Adjudicating Authority
The Ministry of Corporate Affairs, through its official Gazette notification numbered S.O. 831(E) issued on 24/03/2015, formally designated the Registrar of Companies as an Adjudicating Officer. This appointment was made pursuant to Section 454 of the Companies Act, 2013, read in conjunction with the Companies (Adjudication of Penalties) Rules, 2014, empowering the official to determine and impose penalties for contraventions under the legislative framework.
Corporate Entity Details
The proceedings involved Shreekrishna Impex Ventures Limited, a company bearing Corporate Identification Number U52190MP2020PLC050793. The entity maintains its registered office at 7th Floor, SE-020-022, Bansal One Rani Kamlapati Railway Station, E-2 Sector Huzur Bhopal, Madhya Pradesh, India 462016. The company was originally incorporated under the provisions of the Companies Act and falls within the jurisdiction of the Gwalior Registry.
Individual Officers Implicated
The adjudication proceedings also named specific directors who were identified as officers in default:
- Ashish Agarwal (Director Identification Number: 08681765)
- Rakesh Agrawal (Director Identification Number: 09540525)
- Shirish Ramesh Agarwal (Director Identification Number: 01832024)
Statutory Provisions Attracted
Section 450 of the Companies Act, 2013
This provision serves as a catch-all penalty clause for contraventions where specific penalties are not prescribed elsewhere in the legislation. According to this section, when a company or any officer or other person violates any provision of the Act, rules framed thereunder, or any condition, limitation, or restriction attached to approvals, sanctions, consents, confirmations, recognitions, directions, or exemptions, they become liable to penalties.
The penalty structure prescribed under Section 450 establishes:
- A base penalty of ten thousand rupees
- For continuing contraventions, an additional penalty of one thousand rupees per day beyond the initial day of violation
- A maximum ceiling of two lakh rupees for the corporate entity
- A maximum limit of fifty thousand rupees for officers in default or other individuals
Chronology of Adjudication Events
Voluntary Application and Initial Review
The company submitted its voluntary adjudication application through e-Form GNL-1, which was assigned Service Request Number AB7886812, dated 06.10.2025. This proactive filing demonstrated the entity's recognition of its compliance failures and willingness to regularize its position.
Upon receipt, the Registry conducted a comprehensive verification of the facts presented. The examination confirmed that the company had indeed violated provisions that attract penal consequences under Section 450 of the Companies Act, 2013. The violations related specifically to inaccuracies and omissions in the Form AOC-4 submission pertaining to Financial Year 2021-22.
Issuance of Show Cause Notice
Following the preliminary verification, a formal Show Cause Notice bearing identification number SCN/ADJ/12-2025/GL/03085 was issued on 16.12.2025. This notice was directed to both the company and its officers in default, formally intimating them of the adjudication proceedings initiated under Section 454.
The notice outlined the alleged contraventions and called upon the respondents to explain why penalties should not be imposed for the non-compliance of Section 137 of the Act, which mandates the filing of accurate financial statements and returns.
Opportunity of Personal Hearing
In accordance with the principles of natural justice and as mandated under Section 454(4) of the Companies Act, 2013, the Adjudicating Officer granted an opportunity of personal hearing to all parties involved. The hearing was scheduled as a virtual proceeding (E-hearing) on 04.02.2026 at 12:30 PM (Indian Standard Time).
A formal hearing notice bearing identification number EH/ADJ/01-2026/GL/01137 was issued on 20.01.2026, providing adequate notice to all concerned parties. During the scheduled hearing, an authorized representative appeared on behalf of the company and participated in the proceedings, presenting submissions and responses to the allegations.